Offered a Tracker Mortgage

Sassy58

We are coming out of our fixed term mortgage in January with BOI and got the options in a letter yesterday and one of them being offered is a Tracker Mortgage in line with the ECB - we did have the mortgage fixed for 2 years so was surprised we were offered the tracker - everyone keeps saying if you are offered a tracker jump at it - not being really up on all this is it worth while taking a tracker as in would the ECB rate jump alot - if we were to fix it for another 2 years there is a difference of about €290/300 a month

Mac0783

TAKE THE TRACKER.

We have one, and we took out our mortgage 3 years ago repayments were approx. €1500 got letter from bank yesterday with latest rate cut it is now €980! When the ECB starts to go up in approx 2 - 3 years you can always decide if you want to fix it then.

One thing, whatever you decide do it quickly have heard from a lot of friends in same situation you only have 7 days to decide and sign paperwork or they will do it for you and may not be the one you wanted!

Sassy58

Thanks for that - they do say that if they don't hear from us that they will automatically put is on the ECB Tracker Mortgage but have the paperwork with me in work today so might pop it in the post just to be sure

Mac0783

one thing you should consider if you are in a position to do so, is to keeping paying in the additional €300 a month, it will make a massive difference to the length of your mortgage and dramatically reduce the interest you pay. and the great thing about a tracker is that you dont have to tie yourself in to the extra payments, just lodge it in as and when you have the money. have a look at this website, it will show you how increases / decreases in the interest rate and how additional payments can reduce the cost and length of your mortgage..

http://www.drcalculator.com/mortgage/ie/

Gurgle

Before you take the tracker, maybe you should look at / post here the bit that states the mark-up.

If they're offering you a tracker of ECB rate + 5% for example, I'd say its not that good of a deal.

Sassy58

its ESV + 0.5% is the tracker we are being offered

Mac0783

Wow thats excellent!!

Gurgle

Sassy58 wrote: »

its ESV + 0.5% is the tracker we are being offered

Grab and run!

davydart

I have been offered a tracker also but people have told me when you go into bank they will decline you. Is this true

daltonmd

davydart wrote: »

I have been offered a tracker also but people have told me when you go into bank they will decline you. Is this true

If they offer it to you it's because it was in your original mortgage offer. If you can get it out take a look at it, it appears to have been on the OP's. I recall that the banks had tried to snake out of these but some people realised that in their original mortgage contracts this was indeed the offer.

rainbowtrout

Sassy58 wrote: »

its ESV + 0.5% is the tracker we are being offered

As was said, take it and run! You won't get much better than that. The ECB rate went down this month and it's not going to go up any time soon. Like was said, if you can afford to keep paying in the extra €300, keep doing so, it'll make a big difference in the long run. Or save the €300 each month and pay it in as a lump sum at the end of the year. It'll add up pretty fast.

AlmightyCushion

rainbowtrout wrote: »

As was said, take it and run! You won't get much better than that. The ECB rate went down this month and it's not going to go up any time soon. Like was said, if you can afford to keep paying in the extra €300, keep doing so, it'll make a big difference in the long run. Or save the €300 each month and pay it in as a lump sum at the end of the year. It'll add up pretty fast.

I could be wrong here but would it not be a better idea to take that extra €300 and put it into a savings account earning more than the interest on his mortgage (There are plenty out there that will beat 1.5% even taking into account dirt).

rainbowtrout

AlmightyCushion wrote: »

I could be wrong here but would it not be a better idea to take that extra €300 and put it into a savings account earning more than the interest on his mortgage (There are plenty out there that will beat 1.5% even taking into account dirt).

Oh ya, you are right, 1.5% of €3600 = €54, less 30% for DIRT would leave about €40 a year net interest. With a higher interest rate, net interest would be higher also. For me personally, I'd prefer to shorten the term of the mortgage overall and forego the interest.

juan.kerr

Sassy58 wrote: »

its ESV + 0.5% is the tracker we are being offered

What's the ESV rate? Does it differ to the ECB rate?

rainbowtrout

juan.kerr wrote: »

What's the ESV rate? Does it differ to the ECB rate?

It's a typing error. It should say ecb